These days, mature workers are forgoing traditional retirement in order to stay connected, be productive and utilize their knowledge and experience. Companies that take advantage of this new shift will keep their Baby Boomers in their talent pool, thus retaining years of knowledge, leadership and overall competitive skills.
It has been widely communicated that, by 2010, the U.S. will face a shortage of 10,033,000 workers (according to the Bureau of Labor Statistics) due to the number of Baby Boomers reaching retirement age combined with the lack of new workers entering the workforce during the same time period. However, this statistic is based on workers choosing a typical retirement and exiting the workforce.
According to a recent Adecco survey, retirement in its traditional sense (around age 65) may be a thing of the past. Of those polled:
- 41% say they will continue working, but will work fewer hours
- 18% predict retiring from their current profession to try a new career
- 25% of respondents said they think they will have a traditional retirement
- Only 12% predict they will retire early
There are also a number of mature workers who have already retired, yet are returning to work. This “un-retirement” trend is a result of a number of factors. Some of these workers have financial needs, others want to remain competitive in the workforce and contribute expertise, while still others simply have a desire to stay physically active and productive.
In "Managing Today’s Multigenerational Workforce" published by Adecco, we explore how losing Baby Boomers to retirement will potentially inflict the largest “brain drain” corporate America has ever experienced. After all, these are the employees who are running the businesses and servicing clients. They hold current, institutional knowledge. Companies need to take action to mitigate the potential impact retiring Boomers will have on their competitiveness and develop formal policies and programs to encourage employees who are approaching retirement age to continue working.
A threat on competitiveness.
According to the AARP, 79% of business executives agree that the knowledge and experience that mature workers take with them when they retire can hurt a business financially. Mature workers take with them years of knowledge, leadership skills and relationships, among other things.
The Adecco Institute’s Demographic Fitness Survey in 2006 contends that most companies are not well prepared for attracting, developing and retaining mature workers in key areas, including lifelong learning, career management, healthcare, knowledge management and age diversity management. The study found that:
- Companies offer an insufficient range of career management tools.
- Healthcare is ripe for improvement. Few companies go beyond the basic compulsory programs to offer longer-term health tools like stress reduction, lifestyle and dietary advice.
- While an overwhelming majority of companies respect the legal requirements of age diversity, and formally treat all age groups equally, most do little to promote a dynamic culture of mutual esteem, mentorship and skill transfers.
- Although companies often have basic knowledge management tools in place, and understand the technical expertise needed in the workplace, surprisingly most do not know who their experts are.
- While companies offer continuing education tools – and about 50% of employees use these – it is mostly standard workplace-based training focused on qualifications rather than individualized programs or soft-skills training.
While the impact of population aging will not be identical across all economic sectors – and, for some companies, age structure worries might appear far away – organizations will inevitably come to recognize and value the talent and contributions of older workers. To not use their skills and experience will increasingly prove an unjustified waste of business resources.
5 keys to capitalizing on the mature workforce:
- Awareness: Realize that action is required. The hard part, according to the Demographic Fitness Survey, is neither design nor implementation, but rather having the courage at the C-level to tackle workforce aging before it tackles the company. Take a look around your workforce. Where do you see your company in one, five or ten years? Now, where do you want to see the company?
- Knowledge Management: Seek to develop ways for mature workers to pass their knowledge and skills on to younger workers. Make a concerted effort to integrate workers of all age groups on teams and projects, thus ensuring knowledge and skill transfer. Define company-wide knowledge retention tools and processes. Implement succession planning tools where knowledge rejuvenation strategies and platforms for informal and formal knowledge sharing can occur. Create an organizational culture of appreciation for know-how and experience.
- Career Management: Baby Boomers made work/life balance a movement that has defined our workforce culture. Find ways to provide flexibility, such as alternate work arrangements (i.e., flexible scheduling, telecommuting and part-time work). Job preferences for Boomers can also change. Find ways to crack barriers to professional development. Be more open to horizontal career shifts and institute methods to keep workers skilled and motivated. According to the Family and Work Institute, 73% of Baby Boomers give younger bosses low marks on being supportive of their success. Are you doing your part to support the Boomers in your organization?
- Recruitment: Develop new recruiting methods to take advantage of retirees re-entering the workforce, or those looking to change industries or careers. These workers are seasoned pros. They have the experience, education and commitment that would be beneficial to your organization’s competitiveness.
- Retain: To soften the impact of potential retirements, initiate ways to keep Boomers on board longer. Don’t stick to the standard ways of management. Make plans today to understand who you have at retirement age and what your company needs to do to retain those employees.
Create competitive advantage!
An Older Workers Survey conducted by the Society for Human Resource Management found that HR professionals see many advantages to hiring older workers. Respondents said older workers provided invaluable experience (72%), had a stronger work ethic (69%) and were more reliable (68%).
Your company simply cannot afford to lose valued talent to retirement. As mature workers seek nontraditional retirements, your company can take advantage of this trend by developing new methods of recruiting and retaining these experienced professionals. Keeping mature workers on board is essential to remaining competitive today and in the coming years.
Interested to learn more? Contact LHH today to talk talent!